Considerable logistics and providers are required to process credit card payments for your business. Whether you sell online, in a brick-and-mortar location or both, you need a merchant account to accept credit card payments.
A merchant account is essentially a line of credit. It’s an account that funnels your credit card profits into your business’s bank account. Fees are usually extracted from the merchant account before deposit.
How is this a line of credit? If a credit card transaction turns out to be fraudulent, your Merchant Account Provider will front the funds to cover the chargeback immediately, even if you don’t have the funds to repay the cost. This puts your provider in a risky position, which is why providers usually underwrite their customers to assess risk up front and reserve the right to terminate your merchant account should you pose undue risk to the provider.
That said, businesses that don’t accept credit cards risk leaving too much money on the table. If you receive a notice of merchant account termination, following the proper steps is important to obtain a new account and preserve your business.
Numerous reasons explain why your provider might terminate your account or hold funds. If you receive a notice of impending merchant account termination, contact your provider and request a written explanation. This will be helpful in establishing a new account with another provider.
Here are a few reasons why your account might be terminated:
Many of these reasons represent a heightened risk for your provider and can constitute justifiable termination. If your business is terminated for risk-related reasons, it will likely be placed on the MATCH list, which stands for Member Alert to Control High Risk. Maintained by MasterCard, the MATCH list is effectively a blacklist.
Once your business is on the MATCH list, obtaining a merchant account to process credit card transactions is much more challenging, and the terms are less savory.
If you intend to continue processing credit cards, you’ll need to shop for a new provider. Make sure you have the right documentation and do your research on providers before making a hasty switch.
The following are good documents to have on hand when you seek a new account:
Providers also require a number of documents for account set up, such as an application, a voided check, income and bank statements, and balance sheets.
Then, contact providers that are open to taking on higher-risk businesses. These providers do exist, and their terms are just a pill you’ll have to swallow. These providers might offer higher rates, require a reserve of funds held in your merchant account to cover potential losses, take longer to approve your application and limit the cards you’re able to accept.
It isn’t ideal, but it’s the most realistic path forward. The MATCH list is not a death wish for businesses that manage to obtain a high-risk account, however. So long as no new entries are made for your business, it will automatically be removed from the MATCH list after five years, allowing you to reapply for a traditional account with better rates and more flexibility.
Has your business been placed on the MATCH list? Were you able to obtain a high-risk account and get off the list? We’d love to hear about your experience in the comments section below.